Bonfield tells the world BT is dying
Still smiling after 4.6 billion goes down the toilet
British Telecom announced a 32 per cent fall in full-year profits yesterday, sparking a slump in its share price. Shares fell 70p to 922p, wiping 4.6 billion off the company's value.
Of course CEO Sir Peter Bonfield told us it was nothing to worry about. It's heavy investment because of this darn competition that the modern world seems so keen on. It's all buy buy buy at BT because they're laying the path for a glorious future. That's why Bonfield is upbeat and global takeovers are the "fun part" of the business.
Now one of El Reg's number used to work for Pete and reckons he's a lovely bloke. This reporter on the other hand thinks he should be fired for utter incompetence and criminal damage to what could have been a world-beating telecoms company.
BT is up there with the great arrogant companies of the world. But while most of these self-satisfied companies have produced a market-leading product, BT has simply sat tight on its monopoly of the UK's phone lines and barked at anyone that came too near.
When Pete gave a speech saying that most people would have to go to night school to get Internet access because it would too expensive, his total inability to see the way the market was moving was prophetic.
BT's share price is slipping and it will keep slipping while half-arsed strategies are thrown up to counteract the moves of sleeker, fitter young firms.
BT has enormous political power - if you want to see impartial reporting, check out the ridiculously positive coverage of this story in today's broadsheets - but the pressure is building thanks to Internet technology.
The company is standing in the way of the UK's Net economy (got an engaged signal from your ISP? That'll be BT stopping your call because of insufficient capacity) and when the local loops are unbundled, BT's Internet policy will be seen as the Emperor's Clothes nonsense it is.
The official line as to why the results were so poor when telecoms usage has rocketed in the last few years is that BT has being investing, acquiring, preparing.
BT Wireless (which include BT Cellnet) saw its losses triple to 300m. It was outbid for the UK's biggest 3G mobile licence. Suggestions that BT - after a second share slump in just three months - is ripe for takeover have started cropping up and things look decidedly shaky.
So what does it have to do to extricate itself from the jaws of doom? First of all, get rid of the (beknighted) old farts that run the show. They don't know what they're doing. But they'll keep grinning and talking the same tosh until they're either ousted or BT just curls up and fades away.
Secondly - as was posited by the head of one of Britain's ISPs - get out of the consumer business. BT is too fat and slow and it will wear itself out running after the Internet kiddies. Concentrate on the unsexy world of business telecoms and make a fortune. Thirdly, pray. ®